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The Persuaders

Cities outside London face an uncertain economic future. Many are heavily dependent on a rapidly shrinking public sector and have struggled in recent years to expand the number of jobs in the private sector. In Birmingham, Leicester and Nottingham, for example, the private sector jobs market contracted by 6.1 per cent, 13.2 per cent and 15.1 per cent respectively between 1998 and 2008. Over the last six months I have visited ten of the biggest cities outside London to gauge reaction to the Localism Bill. The business and voluntary sector leaders, vice-chancellors and council leaders I spoke to were unclear on where the future job growth is going to come from. Local government is left with the difficult task of trying to plug the gap left by central government austerity.

There is no easy fix. Local city governments have limited fiscal and policy powers with which to try to boost economic growth, and the economic fate of cities is largely determined by the actions of central government.

The jury is still out on whether the government will deliver on its localism promise and devolve meaningful power to local government and communities. However, there is one policy on the coalition's localism pledge card which has the potential to help cities address these growth challenges: directly elected mayors. The government has pledged to hold referenda in the 11 largest cities outside London to see if voters there want to switch to mayoral governance.

The business leaders in the cities I visited were united in their preference for visible and stable leadership. With indirectly elected council leaders, power rests on the shifting sands of annual council elections and party groups. Lack of overall control often leads to fragile coalitions and power-sharing arrangements. In Leeds, under a Lib-Tory coalition until last May, the leadership rotated every six months between the leaders of the two parties. Bristol has had seven leaders in less than ten years. This is no way to run a major city, let alone to project it on the national and international stage and instil business confidence.

Outside London, even cities with more stable leadership generally lack visible leaders with any name recognition or profile. A quiz question I often ask is to name the leaders of Birmingham, Manchester, Liverpool and Leeds - four of the major cities outside London. I have yet to meet anyone - even the Mayor of London - who can name all four, and most people can't even name one. Manchester is best known, but even there most people volunteer the name of the chief executive not the leader. And when you ask the question in Westminster, the mayors of New York and Chicago are better known than the leaders of the great English provincial cities.

However, in order to grow, cities need more than strong, visible leaders who ­respond to good business ideas. An ­essential catalyst of economic growth is confidence among investors and entrepreneurs. Their confidence will strengthen if city leaders integrate their policy into a credible growth plan agreed with the local chamber of commerce and local enterprise partnership. On my tour I heard a range of ideas about what would help the cities grow. In Liverpool, for example, suggestions ranged from creating tightly zoned industrial clusters or little "villages" throughout the city, to integrating transport links across the whole Merseyside area. It is the job of the city leader to work their way through these ideas and decide what's best for the city as a whole.

An elected mayor who is accountable to a city-wide electorate is incentivised to do just that; to make strategic trade-offs across the whole area and develop a plan that will achieve the biggest gains for the city collectively. This happens in London. The Mayor of London publishes the London Plan, which pulls together growth opportunities into a vision for the future of London. The mayor also has power to determine strategic planning decisions for the capital. The same should apply to mayors of other cities. The mayor's four-year term and strategic powers provide enough stability and confidence for the plan to be taken seriously.

On my tour, I heard stories of crucial investment projects, including football stadiums in both Bristol and Liverpool, which have been seriously delayed and even shelved by planning committees. Because these committees are staffed by councillors who are elected by individual wards, they are often subject to intense political pressure from Nimby residents.

Mayoral governance offers an alternative. The mayor's strong executive position and wider constituency would allow them to act decisively and make rational city-wide trade-offs. The less time spent on inwards-facing negotiations with the council, the more there is to spend on growth priorities. Of course, decisions need to be scrutinised and mayors need to be robustly held to account. In our report Making the Most of Mayors we recommend leaner task-and-finish overview and scrutiny-committee systems, and dedicated scrutiny-support officers, appointed by the council, as ways to bolster the scrutiny of mayoral decisions.

Direct election and higher profile gives mayors "soft" power as well as "hard" power - the ability to secure preferred outcomes through persuasion and attraction. Mayors can use this to convene different interests and generate widespread backing for local growth priorities. Steve Bullock, the mayor of the London Borough of Lewisham, was elected by 52,531 voters across the borough, while Councillor Peter John, the leader of neighbouring Southwark council, was elected by 2,502 voters as one of three councillors to represent South Camberwell. Boris Johnson was elected by a jaw dropping 1,168,738 Londoners in 2008. If the Mayor of London asks for a meeting, you clear your diary; if you are a minister, you return his calls immediately.

London's Crossrail project for a new east-west cross-London rail line - with which I was intimately involved as Transport Secretary - would not have happened without huge amounts of both "hard" and "soft" power exercised by mayors Ken and Boris. The two mayors persuaded the capital's business community to stump up about one-third of the cost of the £16bn scheme, without which it would not have proceeded. The same was true of the transformation of secondary education in Hackney, on which - as schools minister - I worked closely over many years with the Hackney mayor, Jules Pipe.

Facing outward

The mayor of a London borough recently told me that he acted "like a thread" running through his area, convening different organisations and decision-makers outside his formal remit to support growth priorities. This soft power and greater time spent in outward-facing roles boosts the capacity of mayors to work as persuaders as well as decision-makers, a skill that can help build and maintain coalitions for change and secure ongoing support for growth priorities.

The mayoral model, as proposed in the Localism Bill, leaves a lot to be desired. It is crucial that the Secretary of State should announce, well before the first referenda take place next year, which powers they will transfer to mayors. The government needs to be bold and give mayors strategic planning powers and the power to appoint people (themselves if they wish) onto local governing bodies such as the Integrated Planning Authority and the Local Economic Partnership. In the longer term, government should consider "metro mayors" working at city-region level, for example, Merseyside or Greater Manchester. This would allow truly strategic planning and integrated transport policy across the natural economic area.

The task ahead is huge and our big cities need all the help they can get. Directly elected mayors, given powers over planning, economic development and transport, would offer significant advantages in helping cities outside London to boost economic growth and drive job creation.

Andrew Adonis is Director of the Institute for Government

This article first appeared in the New Statesman supplement 'Competition in a New Society: Cities and Regions'